Admittedly, the provisions of Section 2(f)(iii) provides deemed manufacture definition only when the goods are labelled or relabelled or MRP is altered, which itself establishes the fact of a fixation of MRP on the goods. In the absence of any allegation of fixation or alteration of MRP, the reasoning adopted by Commissioner (Appeals) cannot be faulted upon.
FULL TEXT OF THE CESTAT JUDGMENT
All the three appeals filed by the Revenue are being decided by a common order as they arise out of the same impugned order passed by Commissioner (Appeals) vide which he has set aside the order of the original adjudicating authority.
2. I have heard Shri k. Poddar and Shri H.C. Saini, ld. DRs appearing for Revenue. Nobody appeared for the respondents. As per facts on record, I find that the respondents were importing home appliances and were clearing the same on payment of customs duty on the basis of the MRP stickers available on the said goods.
3. Subsequent investigations made by the Revenue revealed that such MRP stickers were being removed by them. However, it also came to the notice of the officers that no fresh MRP was being declared under the said goods, which were being sold by the respondents without affixing the said goods with any new MRP. However, they entertained a view that such removal of MRP sticker amounts to manufacture, in terms of Section 2(f) of Central Excise Act, 1944 which provides a deeming provision of manufacture if the goods are labelled or relabelled and includes the declaration or alteration of retail sale price to render the products marketable to the consumers. Based upon the same, proceedings were initiated against the respondents resulting in passing of an order by the original adjudicating authority, confiscating the goods and imposing redemption fine and penalties. Surprisingly, though the original adjudicating authority held that the process of removing of MRP amounts to manufacture, but no duty of excise was confirmed against the respondent.
4. On appeal, Commissioner (Appeals) set aside the impugned order by observing that removal of MRP sticker, without affixing a new MRP does not amount to manufacture. For better appreciation para-13 of the impugned order is reproduced below:
“13. The entire case goes on the premise that all the imported goods were required to bear labels/stickers of MRP in terms of Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2006 and Weights and Measures (Packaged Commodities) Rules. Therefore, it is presumed that the MRP was put on these imported goods before clearance of the same from customs. However, all these are mere presumptions and the same can’t be applied to confiscate the goods. As mentioned above, even if MRP stickers were removed, this process does not lead to alteration of MRP, as it has not been alleged that new revised MRP was affixed. Supply of Price list has also not been correlated with revision of MRP. Thus, the criteria of manufacture under Section 2(f) of the Central Excise Act has not been fulfilled to claim dutiability and hence liability to confiscation of the goods.”
5. As against the above findings of Commissioner (Appeals), Revenue is in appeal.
6. I find that there is no dispute on the facts. The entire case of the Revenue is limited to the allegation that the assessee removed the MRP sticker. There is no further allegation that any new MRP sticker were affixed to the goods in question. Admittedly, the provisions of Section 2(f)(iii) provides deemed manufacture definition only when the goods are labelled or relabelled or MRP is altered, which itself establishes the fact of a fixation of MRP on the goods. In the absence of any allegation of fixation or alteration of MRP, the reasoning adopted by Commissioner (Appeals) cannot be faulted upon. I find no infirmity in the impugned orders and accordingly, both the appeals filed by Revenue are rejected.
(Pronounced in open Court)